Greek bailout: what the experts say

Opposition from the Greek people to austerity measures could derail the deal. Photograph: Yannis Behrakis/Reuters

Kevin Humphreys, (aka "broker Kevin") head of BGC's short end euro desk: "News overnight that agreement has finally been reached on the latest Greek bailout has been met with mixed enthusiasm so far. This is hardly surprising when we consider that there appears to be few of the parties involved coming away from negotiations truly happy. The Greeks themselves certainly do not appear happy, rather that they have been press-ganged into promising unsustainable measures with much of the bailout funds heading straight to creditors without actually having much of a positive impact on the economy. The eurogroup do not seem overly happy, having seen nothing other than deterioration in Greek fortunes since they were last asked to re-sell the joint-enterprise European community idea to their electorate."

Elisabeth Afseth, fixed income analyst: "It's a bit like a game of tennis: two sets down and the opponent has three match points in the third. Greece just got back to deuce."

Michael Hewson, senior market analyst at CMC Markets: "After hours of tortuous negotiations Greece was finally granted its second bailout in the early hours of this morning and thus now will be able to meet the €14.5bn bond payment in March, and avert a messy default. It has come at a cost though, after an IMF/Troika report laid bare the problems facing the Greek economy, and it now rests on whether markets think the programme is even remotely credible, or achievable for that matter, as Greece seeks to rebuild its broken economy. While the package may buy more time it remains highly debatable whether it will achieve the measures it is designed to, given the magnitude of the problems in the country."

Sony Kapoor, managing director of economic thinktank Re-Define: "Based on what we have seen today, Greece will almost certainly need another bailout. The Troika have had to do some arithmetic gymnastics in order to make the numbers add up but their optimistic assumptions are unlikely to hold. The mechanism for the contribution of profits on central bank holdings of Greek bonds is unnecessarily complicated and creates additional uncertainty and future potential disagreements. If haircuts had been imposed to private holdings of Greek bonds when debt restructuring was first discussed in 2010, the situation for Greece would undoubtedly have looked significantly better now. One can't help but get the feeling that everyone involved is going through the motions, doing what they feel they have to do, rather than what they want to or what they believe in. Confidence in the success of what has been agreed is rather low."

Gary Jenkins of Swordfish Research: "The Troika has agreed to lower the bailout loan rates, the private sector bondholders have agreed to take a larger writedown than was previously agreed (53.5% of face value rather than 50%) and the ECB has agreed to give up its profits in order to reduce the debt/GDP figure to 120.5% by 2020. The figures are the EU's baseline numbers but according to a 'strictly confidential' debt sustainability report, under a slightly more pessimistic 'tailored downside scenario' debt/GDP will only fall to 160% by 2020 and Greece would need considerably more bailout cash. Obviously other risks are that the Greek people turn against the austerity measures and that at some stage the Greek politicians decide that a default is the only option."

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